posted at 11:21 am on May 2, 2012 by Ed Morrissey

Paul Krugman continues his Chicken Little tour in service to his new book, End This Depression Now!, by giving the Obama campaign a little free advice. Did I say “free”? Actually, it comes at a steep, steep price:

In his book, which hit shelves May 1, Krugman laments the “shadow of economic catastrophe” we live in, and the opportunity cost of huge stockpiles of underutilized human and physical capital. The government should put that to work, Krugman says, first by reversing the state layoffs of teachers, firefighters and other employees, and then ideally with a New Deal-style public works push to rebuild American infrastructure by putting the unemployed to work. But even though GOP opposition makes that all but impossible, Krugman believes it’s a mistake for Obama not to go the extra mile and at least tell voters what more he would do if only he could.

“There is a political danger to Obama, which is that [Mitt] Romney can go around saying, ‘The economy is still lousy,’ which is true,” Krugman said. “And the fact that Obama has never made a really clear case for his own economic leadership hurts. Now, I still think Obama will probably win, because there are other issues, but they have created a trap for themselves on the economic policy front by allowing themselves to own a weak economy in a way that they shouldn’t, because a lot of the problem has been tortured opposition from the Republicans.”

The White House’s narrative developed amid strong political headwinds. Pressure not only from Republicans but many Democrats and even administration officials, along with a broad establishment consensus, compelled Obama to pivot to deficit-reduction, after the Democrats’ 2010 congressional losses and in the face of an exploding national debt.

I’m pretty sure that a proposal to spend another $2 trillion in stimulus spending would just about put a bow on the election for Mitt Romney, not Barack Obama. That became very clear after 2010, when Republicans won a landslide in House elections that hadn’t been seen in a midterm since 1938. However, the notion that Obama pivoted to deficit reduction is rather ludicrous. His proposed FY2013 budgets reduced the deficit to $900 billion, which is better than the four straight trillion-dollar-plus deficit budgets Obama signed — remember, he signed the FY2009 budget after the Democratic Congress played keep-away with George W. Bush — but it’s hardly a reduction to pre-Obama levels.

On the other hand, Krugman does correctly identify the inherent contradiction in Team Obama’s campaign:

“They’ve tied themselves up in knots because they’ve bought into this notion that it would sound wrong to admit that they haven’t been able to do everything that they really should have done,” Krugman told TPM in an interview following the release of his new book, “End This Depression Now!” “It’s incredible — they can’t quite make up their minds on whether the theme is that Republicans are standing in the way of doing what has to be done, or things are really good and America’s back on track. The problem is that you can’t perceive both of those lines at the same time.”

No, they have to argue that the 2009 stimulus worked, when it obviously didn’t. They can’t blame GOP recalcitrance for that, either; Democrats locked Republicans out of the drafting of that stimulus package, and then passed it themselves without any GOP votes in the House and only three in the Senate, including one who later switched parties (Arlen Specter). They own the 2009 stimulus package, and they own the results.

Speaking of results, the Romney campaign released another campaign ad today, attacking Obama on his promises of economic resurgence:

How do you define “progress”? Probably not with these economic statistics. No matter what Krugman claims now, the Obama administration proposed the $800 billion stimulus and predicted it would stop joblessness from rising above 8%, and it hasn’t been below 8% since. That’s failure no matter how one wants to spin it.

Paul Krugman vaulted over the line recently, issuing an ad hominem attack on Fed Chair Ben Bernanke for not doing enough to boost the economy. Krugman’s anxiety that the stuttering recovery will bounce President Obama from the White House seems to have loosened his already-fragile grip on reality. His conclusion – that “right-wing bullying” is holding Bernanke back – seems especially nonsensical, even for the truculent Mr. Krugman. …

Krugman’s frustration is understandable. Many Americans are still without jobs, and income growth is tepid. However, driving the nation full tilt towards the next financial cliff is not the answer. Leadership and pro-business measures such as those adopted in Canada and Germany in recent years – an approach consistently undervalued by the Obama White House – would better help us get back on the speedway.

Fortunately, the Fed is in the hands of a sober driver, who appears immune to right-wing bullying. Let us hope he will resist Krugman’s left-wing bullying as well.

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This man is literally F-ing insane. Einstein’s quote on insanity was never made so much more clearly than in this example: “The definition of insanity is doing the same thing over and over again and expecting different results.”

The government should put that to work, Krugman says, first by reversing the state layoffs of teachers, firefighters and other employees, and then ideally with a New Deal-style public works push to rebuild American infrastructure by putting the unemployed to work.

Teachers- Union.
Firefighters- Union.
Other employees- Presumably all the SEIU members

How much of a trillion dollar “stimulus” is actually put directly into “infrastructure”?

As a complete outsider with no knowledge of the ins and outs of budgeting and government methodology…..I would be willing to put my life savings on the line and bet that 60 or 70 per cent of the monies are syphoned off by corruption and fraud after most of the monies are spent on propping up failing pensions and current salaries. I would bet at least 10 or 12 trillion would need to be shoveled into the pipeline for 1 trillion to become real concrete and steel.

Krugmans theories are DOA because he actually believes the system is efficient. Idiot.

Can we all just agree at this point that Krugman is clearly insane and move on? Ain’t nobody paying attention to this lunatic except for those poor deluded souls who still waste their money subscribing to the NYT.

Last night’s special on PBS’s Fontline sure was a study in balancedd reporting. Interspersed with clips of Obama, Geitner, Summers and thier minions dealing with the financial crisis of 2008, we are treated to the following list of ‘expert’ talking heads who help the viewer put all of this complex information in context:

Krugman
Alter
Reisch

Whichh led to the e most stilted, misleading characterization of the financial crisis possible. And to put an exclamation point on that statement, let me add that the words ‘stimulus package’ were mentioned but once in 120 minutes, and only in passing.

Apparently the financial crisis was all about Obama’s grand leadership and not at all about the awful, misguided decisions he made day after day.

This man is literally F-ing insane. Einstein’s quote on insanity was never made so much more clearly than in this example: “The definition of insanity is doing the same thing over and over again and expecting different results.”

Why aren’t each and every one of these ads being translated into Spanish and posted an a Spanish YouTube channel?

To win we need to reduce Obama’s margins among Hispanics since we aren’t going to reduce them among blacks and how knows how women are going to vote.

Obama is engaged in a War on Hispanic Catholics. He and Eric Holder have martyred Jamie Zapata and hundreds of Hispanic Catholics on both sides of the border with their insane Fast And Furious assault on the Second Amendment. They also killed Irish-American Catholic Brian Terry and are still killing hundreds through the weapons they deliberately put into the hands of drug cartels.

Obama and Al Sharpton have lynched Hispanic Catholic and registered Democrat George Zimmerman causing a race war and making it unmistakably clear that Hispanics are the field Negroes on the liberal ethnic plantation.

Mitt, show us you do not belong to the stupid party. Put all your ads into Spanish, and let us spread them all over the internet.

His proposed FY2013 budgets reduced the deficit to $900 billion, which is better than the four straight trillion-dollar-plus deficit budgets Obama signed

A proposed budget, one that gets blown down by unanimous vote, is a complete vapor. Perfectly fitting that a pretense of doing something is as close as teh won has ever come to backpedalling from reckless spending increases. Of course, Krugman is worse, he’s supposed to be intelligent, and has never met a socialist policy he didn’t love. His answer seems to be; things aren’t better because the government hasn’t siezed enough control over the lives of individual citizens. I hope that the Resident takes his advice. That should clear up any chance of avoiding a landslide loss in November.

So, basically, he is saying when you have a hole this deep you have to throw a LOT of money down it to fill it up? And this works somehow even though, to most people, it looks like you are shoveling faster to make the hole deeper?

Krugman’s attitude, if nothing else, shows the default position the left will take if Romney wins in November. It won’t be because Obama grew government too much and sucked the life out of the job-creating small business private sector thanks to over-regulation; it’s going to be because the government didn’t spend enough money and didn’t do enough micro-managing of the economy.

Apparently the financial crisis was all about Obama’s grand leadership and not at all about the awful, misguided decisions he made day after day.

DrW on May 2, 2012 at 11:43 AM

Good call, the financial crisis was caused by Obama. It was only a mild problem, nothing serious. Hard to imagine unemployment didn’t return to 6%.

And yes, Obama’s decisions were just so terrible that the auto industry remains at the center of the country’s industrial base and the US economy has remained in better shape than most of Europe, despite the fact that the global financial crisis originated from the US. How terrible!

An unscientific poll on local Fox affilliate in Los Angeles had 94% re-electing Obama vs. Romney.

I FORMALLY apologize to America for Los Angelenos….

originalpechanga on May 2, 2012 at 11:26 AM

The beauty of it is that Obama can win 100% of the votes in California – every single one of them – and it won’t affect the electoral vote one way or the other. Whether he wins by 1% or 100% in CA, he still gets 55 votes.

And yes, Obama’s decisions were just so terrible that the auto industry remains at the center of the country’s industrial base and the US economy has remained in better shape than most of Europe, despite the fact that the global financial crisis originated from the US. How terrible!

bayam on May 2, 2012 at 11:55 AM

You might want to look into the thread on economic news.
Might change your mind.

The government should put that to work, Krugman says, first by reversing the state layoffs of teachers, firefighters and other employees, and then ideally with a New Deal-style public works push to rebuild American infrastructure by putting the unemployed to work.

Most of the first monster stimulus went to the states so they wouldn’t have to lay off government workers. Sooner or later, the states have to deal with their budget problems without Federal money. The New Deal public works thing – didn’t Obama already propose that in his recent so-called Jobs Bill? I think he did propose a lot of infrastructure “investment” along with about $400 billion in new taxes (so it was guaranteed not to pass).

These Democrats epitomize the definition of insanity: doing the same thing over and over, expecting a different result.

“He later wrote in an autobiographical essay, “It was, in a way, strange for me to be part of the Reagan Administration. I was then and still am an unabashed defender of the welfare state, which I regard as the most decent social arrangement yet devised.

“Most critiques of Krugman as a public intellectual begin with what is apparently an obligatory disclaimer, usually in the very first sentence — something to the effect that Krugman is a very accomplished and well-respected economist. Then comes the “But…” and the critique proceeds in earnest, often scathingly.

But why concede this honor to Krugman? So what if he won the Nobel Prize? The real test of Krugman’s mettle as an economist is the accuracy of his economic forecasting. The fact is that, with about three decades of evidence now in, Krugman’s track record, to use a technical term favored by economists, sucks.

He’s not always candid about this. But once, under the pressure of a televised debate with conservative talk-show host Bill O’Reilly, Krugman blurted out an understated if truthful self-evaluation: “Compare me . . . compare me, uh, with anyone else, and I think you’ll see that my forecasting record is not great.”

The most egregious example of “not great” is Krugman’s utterly incorrect 1982 prediction that inflation would soar. He made this prediction from no less lofty a perch than the White House, as staff member of the Council of Economic Advisers in the first Reagan administration. In a memo titled “The Inflation Time Bomb” Krugman wrote with co-author Lawrence Summers, “We believe that it is reasonable to expect a significant reacceleration of inflation . . . at least 5 percentage points to future increases in consumer prices. . . . This estimate is conservative.”

It also turned out to be hilariously, side-splittingly, knee-slappingly, rolling-on-the-floor wrong. Except for a tiny uptick the very next month, inflation didn’t rise; it fell. Four years later, it had fallen to 1.18 percent, a rate so low as to border on deflation.

In one of his Times’ column, he wrote that the Dow Jones Industrial Average was overvalued, saying, “Let the blue chips fall where they may.” As for the Nasdaq — which at that point had almost doubled over the prior year, and more than tripled over the prior three years — Krugman said soothingly, “I’m not sure that the current value of the Nasdaq is justified, but I’m not sure that it isn’t.”

We all know what happened. As of this writing, the Dow is about 20 percent higher than when Krugman wrote those words — and that’s not including a decade of dividends. The Nasdaq is about 42 percent lower. It hit bottom in October 2002, a 75.7 percent loss from where Krugman said not to worry about it. After something of a recovery, stocks fell again. They hit a real bottom — about a week after Krugman wrote a Times column asking the rhetorical question, “Is there any relief in sight?” His wrong answer: “No.”

Perfect bookends: He missed the top, and then three years later, he missed the bottom. But then he outdid himself. In June 2003, with the Nasdaq up 20 percent since Krugman’s “No,” did he recognize his error and reverse course? Again, no. Krugman wrote that “the current surge in stocks looks like another bubble.” From there the Nasdaq was to rally another 75 percent.”

If you name a subject, I probably can give you Janus Krugman’s quotes…on both sides. “Unions do not cause higher unemployment” v. “Unions do cause higher unemployment.” “The Bush administration was responsible for “The Great Recession” v. “The fact is, all these promises are silly: Administrations don’t cause recession and recoveries–if anyone is in charge of the business cycle, it’s the nonpartisan technocrats at the Federal Reserve.”

The Ferret and his wife actually stood around a fire in their backyard with their friends on election night in 2008 burning effigies of Bush, Cheney, etc.

What does this have to do with encouraging people to work, creating value, creating wealth? You pump money into the system, that’s going to do, what, exactly? I’m barely an economic novice, so I have to ask basic questions. The economic strength of our country is innovation, and entrepreneurship, yes? Which is the envy of the rest of the world. How does a stimulus encourage that? And what about the resulting debt?

Anyone who thinks that the current depression was caused by TOO LITTLE government spending is, with all due respect, beyond lunacy and beyond imbecility.

I hate to resort to this kind of language to describe any horifically mentally impaired individual. But I’m afraid the only word that could possibly be used to describe Paul Krugman’s thought process is: liberal.

. The government should put that to work, Krugman says, first by reversing the state layoffs of teachers, firefighters and other employees, and then ideally with a New Deal-style public works push to rebuild American infrastructure by putting the unemployed to work.

I’m sorry?

Is he now admitting that was not the use of the first stimulus, even though he and Barry said it was?

No teachers have been laid off where I live… and we have more police and firemen than four years ago. The school department has several indulgences I can’t even mention here including some new buildings.

I did not see them cut their salaries, the only thing that happened in MA is that Governor Duval Patrick (D) Good friend of the president, and Mike Make ‘em Bloody Capuano pulled a Scott Walker to cut health care costs.

Since they are democrats they allowed them to cut our expenses in town government that way to save some money, but no budgets have been cut anywhere.

What on earth is Paul Krugman talking about? You in your states maybe laid of teachers? not here.

In Germany in the 30s they built the Autobahn, with otherwise unemployable labor. The dirty secret was they worked them like slaves, and anyone who complained was taken off, never to be seen again.
orbitalair on May 2, 2012 at 12:20 PM

One of the workers, a German citizen, actually wrote a letter to Adolph Hitler, explaining the apalling conditions of his labor camp — sure that, somehow his beloved Fuhrer simply wasn’t aware of how bad things were, and that he would move Heaven and earth to fix things once he was fully apprised of the situation.

The man received a high honor for his trust, admiration and loyalty. Hitler personally ordered his execution.

I’m not in the least ashamed to admit that I laughed when I heard that. Amid all the millions of atrocities performed in all the Socialist nations of the world, we must always remember that there is never really just one man who enslaves a nation: Many people (who now perversely refer to themselves as “liberals”) very happily put their heads in the yoke, fully expecting to be cared for with infinite love and kindness by their fearless leaders.

In the end, they never get anything like what they want, but they always get exactly what they deserve. The tragedy is that they manage to drag free men and women into the abattoir with them.

In many ways this economy does resemble the Great Depression. FDR took over and the economy just could not recover when faced with the constant federal onslaught of regulation and stimulus. It took a world war to get us out of economic stagnation. I pray that history does not repeat itself to that point, but I am also hopeful.

I am hopeful that this becomes the moment in history when Americans finally wake up to the destructive nature of a bloated federal government and start to walk it all back. I am hopeful that the terrible policies started in 1933 will start to be undone in 2013. The only thing I see stopping this reversal is another world wide calamity that leaves the United States as the only producer in the world. We prospered after WWII not because we were better, but because we were the only viable economy in town.

Question: Are the liberals purposely destroying America or are they just clueless?

Answer: Stimulus failed, Stimulus 2 failed, they want another stimulus and more failure… This is intentional, it is not about differing beliefs, it is not about being an idiot. It is evil, plain and simple.

It remains a mystery to me how Krugman could have possibly won a Nobel in economics.

DaveDief on May 2, 2012 at 11:44 AM

He didn’t.

What he “won” was a Memorial Prize in Economics, created in the late 1960s by a bunch of European economists just as idiotic as Krugs is. The Nobel Foundation administers it, but it is not a Nobel Prize.

Answer: Stimulus failed, Stimulus 2 failed, they want another stimulus and more failure… This is intentional, it is not about differing beliefs, it is not about being an idiot. It is evil, plain and simple.

jeffn21 on May 2, 2012 at 12:44 PM

Great, another bubble boy. Yes the US financial crisis was a minor affair and the US economy would seen positive growth without it. China, Germany, and other economies that enacted similar stimulus policies all failed as well. You seem to have a Joe the Plumber level of financial literacy.

In Germany in the 30s they built the Autobahn, with otherwise unemployable labor. The dirty secret was they worked them like slaves, and anyone who complained was taken off, never to be seen again.

So you mean every federal highway bill passed by Congress over the last 50 years has taken this country to the brink of fascism or communism? Wow you people are so educated and intelligent.

In the end, they never get anything like what they want, but they always get exactly what they deserve

And many of you clowns are getting exactly what you deserved when you supported “free trade” policies that represented unfair give-aways to China and other competitors, and then started whining when it was obvious that you lacked the skills to complete in a global economy. Wake up.

News flash- there are tens of thousands of job openings in high growth industries, especially hi tech. Maybe you should start taking personal responsibility for your problems instead of blaming the government. Parroting right wing radio shows and indulging in your delusions about socialism is laughable.

1. Build roads and infrastructure – we already did that with first “stimulus”, right?
2. First “stimulus” results speek for themselves, why would we do that again?
3. Firefighters, cops, teachers – meaning any job that is union and create no economic benefit.
4. The best these wizards of smart can come up with is to take trillions of dollars out of the economy to hire a bunch of ditch diggers and road crews. Seriously, how does this grow our economy? How about encouraging investment in real companies that create real jobs, that lead to real wealth creation for everyone?